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Brazil's real hits ten-month high
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Colombian peso rises for ninth straight day
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Peru's sol rises ahead of interest rate decision
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Mexican peso rises ahead of central bank meeting minutes
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Latam FX and stocks rise 0.4% each
By Shashwat Chauhan and Bansari Mayur Kamdar April 13 (Reuters) - Peru's sol rose on Thursday ahead of a central bank decision, tracking gains in Latin American peers as the dollar fell after U.S. economic data raised hopes that the Federal Reserve is near the end of its rate hiking cycle.
The MSCI's Latin American currencies index added 0.4%, extending gains for a third straight session and hitting its highest level in over eight years. The dollar index slid to its lowest level since February after official data showed U.S. producer prices unexpectedly fell in March.
It comes after data on Wednesday showed U.S. consumer prices
barely rose in March, further bolstering speculation the Fed's
rate hiking cycle is either already finished or will be by May.
Peru's sol rose 0.5% against the dollar ahead of its
central bank's decision at 2300 GMT at which the Banco Central
de Reserva del Perú (BCRP) is expected hold its lending rate
steady at 7.75% .
"The BCRP, like us, expected a clear decline in inflation
beginning in March, which has not materialized yet," said Mario
Guerrero, Deputy Head Economist at Scotiabank in a note.
Guerrero notes that 12-month inflation expectations remain
stable, though are still well above the target range. Added to
this is the fact that underlying inflation continued to rise, so
these factors make it likely that the pause in the interest rate
hike cycle that began in February will continue.
The Colombian peso led regional gains, up 1% against
the dollar and set to extend its rally for a ninth straight
session.
The Chilean peso gained 0.9%, rising for the third
straight day, as the world's largest copper producer benefited
from higher red metal prices.
Copper prices touched their highest in nearly two weeks,
buoyed by upbeat trade data from top metals consumer China and a
weaker dollar after U.S. inflation cooled. The Mexican peso inched 0.2% up ahead of the release
of minutes from the Mexican central bank's March monetary policy
meeting where the central bank had raised its lending rate to
11.25%.
Brazil's real edged 0.2% higher against the
greenback, briefly touching its highest level in ten months.
Finance Minister Fernando Haddad said Brazil's central bank
has an opportunity to lower interest rates to help boost
economic growth as fiscal and monetary policies are converging.
Latin American stocks advanced 0.4%, with
Mexican stocks leading regional gains.
Brazilian stocks , however, slipped 0.2%, dragged
lower by financial stocks.
Elsewhere in emerging markets, the Czech crown rose to its highest against the euro since July 2008 as
inflation data chimed with the central bank's hawkish tone.
Pakistan's international bonds rose as much as 1.2 cents to
trade between 34 cents and 46 cents in the dollar, data from
Tradeweb showed.
Key Latin American stock indexes and currencies at 1440 GMT:
Stock indexes Latest Daily % change MSCI Emerging Markets 998.02 0.45 MSCI LatAm 2305.97 0.43 Brazil Bovespa 106719.89 -0.16 Mexico IPC 54834.91 0.92 Chile IPSA 5351.68 -0.03 Argentina MerVal 268492.39 0.615 Colombia COLCAP 1230.96 -0.1
Currencies Latest Daily % change Brazil real 4.9090 0.63 Mexico peso 18.0393 0.13 Chile peso 796.9 0.92 Colombia peso 4418.12 0.93 Peru sol 3.7698 -0.19 Argentina peso (interbank) 214.6800 -0.20 Argentina peso (parallel) 395 0.76 (Reporting by Shashwat Chauhan and Bansari Mayur Kamdar in Bengaluru; Editing by Christina Fincher)
